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| Enhancing Digital Lending Integrity: RBI's DIGITA Proposal |
The Reserve Bank of India (RBI) is contemplating the establishment of a Digital India Trust Agency (DIGITA) to counter the surge in illegal lending apps and mitigate the rising instances of cyber fraud. This envisioned agency aims to authenticate digital lending apps, uphold a public repository of verified apps, and foster transparency and accountability in the digital lending landscape.
In recent years, India has witnessed a proliferation of fraudulent activities and unethical practices within the digital lending sector. To address this concern, the RBI has undertaken several initiatives, including collaborations with the IT Ministry and Google, to distinguish lawful digital lending apps and eradicate unauthorized ones from the Google Play Store.
Functions of DIGITA:
Once operational, DIGITA will undertake the following responsibilities:
- Verification of digital lending apps: DIGITA will scrutinize digital lending apps to ensure adherence to RBI regulations and directives.
- Maintenance of a public register of verified apps: The agency will curate a transparent registry of approved digital lending apps, simplifying consumers' ability to distinguish legitimate platforms.
- Counteracting financial crimes: Apps lacking DIGITA's verification mark will be flagged as unauthorized for law enforcement purposes, serving as a pivotal measure in combating financial crimes in the digital sphere.
Collaboration with Google:
The RBI has furnished the IT Ministry with a catalog of 442 digital lending apps for Google's whitelist validation. From September 2022 to August 2023, Google delisted over 2,200 digital lending apps from its store. Subsequently, Google has instituted a policy permitting only apps released by RBI-regulated entities (REs) or in collaboration with REs on the Play Store, following directives from the RBI and the Department of Financial Services under the Finance Ministry.
Current Status:
As of March 2024, the RBI has yet to formally announce the establishment of DIGITA, and the agency remains a proposed initiative.